Building resilience to climate risks

According to Gallagher Re, natural perils cost the insurance industry over $120 billion USD in 2023. Whilst many of these losses will have been unpreventable, there are actions that can be taken to help reduce losses in the future.

Early detection of events such as floods and wildfires can give policyholders time to protect valuable assets. For example, Liberty Specialty Markets provides real-time flood warnings to customers. They are triggered by surface water flood forecasts and sensors which are placed in water channels close to their premises, provided by flood technology company Previsico.

Whilst this type of technology has the potential to significantly mitigate damages, it is currently not widespread. We spoke to Swiss Re’s Ruta Mikiskaite, Head of P&C Solutions UK&I, to get her view on how this might change:

“There was a time when hardly anyone bothered with home security systems or smoke detectors. Now, they’re not just present; they’re a must-have in many places. Looking ahead, we might see the same shift for wildfire resilience measures, becoming widespread and essential.”

Alongside early warnings, property resilience measures can be one of the most effective ways of reducing losses. Schemes that encourage properties to be ‘built back better’ after climate-related events is a key way of building resilience. We expect to see increasing support from insurers for these types of programmes over the coming years.

In this month’s issue of Climate Risk, we cover new initiatives for reducing the impact of climate events; including a partnership for severe weather early warnings and investment into companies focusing on climate resiliency.

Evening Event: Getting ahead of the risk curve – future proof your risk management strategy, 5th March

Between climate risk, supply chain disruptions and digital vulnerabilities, corporates are facing more potential losses than ever. Join us for our next evening event on 5th March where risk managers, innovators and insurers will share their insights on emerging technologies and best practices. Topics of discussion will include net zero strategies, geospatial analytics and parametric insurance.

Networking Event: Catastrophe camaraderie – convening the modelling minds, 27th March

Catastrophe models have provided insurers with data and analytics to price and manage risk for over 30 years. The community of model buyers, users and reviewers is one of the best examples of collaboration for the benefit of their clients and their organisations. InsTech is delighted to be running a series of quarterly “meet-ups” to provide a chance to meet old friends and make new ones. Our first event will be held on 27th March in collaboration with CoreLogic.

Networking Event: Sustainability in insurance, 2nd May

While every insurance company is at a different stage on its sustainability journey, a lot can be learned from sharing experiences and knowledge. On 2nd May we are hosting an event to bring together the insurance leaders working on ESG and sustainability. It will be an insurer-only evening, with limited spaces available. If you work in a sustainability role at an insurer or broker and are interested in attending, email us at [email protected].

GeoSmart: putting a spotlight on groundwater flooding

Founded in 2013, GeoSmart Information provides analytics on groundwater flood risk across the UK. We sat down with Paul Drury, Director of Product Development, to discuss why insurers should be thinking about groundwater flooding and what the company can do to help.

EarthScan: making climate science accessible

We recently spoke with Mitiga Solutions’ EarthScan team to discuss its newest climate intelligence tool, how insurers and corporates are using it and why the company is continuing to invest in climate science expertise.

The burning question – what is causing wildfires?

Wildfires have cost the insurance industry more than $70 billion over the last decade. Early detection and fire prevention strategies are the most effective ways of reducing losses. But to stop the burning quickly, we need to understand how wildfires are starting. This article explores the main ways that fires are being ignited and their effects on insurance.

In the news…

Fathom collaborates with the World Bank to offer free flood risk data

Flood modeller Fathom will offer its data for non-commercial use to 16 countries under a new agreement with the World Bank. This includes countries that are among the most vulnerable to climate change, such as Somalia and Pakistan. They will be able to receive data on inland and coastal flood risk for the current climate, as well as a number of climate change scenarios – all free of charge.

QBE launches fund to support early-stage climate solutions

QBE North America has launched a new initiative, the QBE Possibilities Fund, to support early-stage climate projects aiming to contribute to a more resilient and sustainable future. QBE will collaborate closely with funders, partners and early-stage companies, contributing expertise and resources to help address climate challenges.

CoreLogic: over half a million Californian homes at risk of flash flooding

CoreLogic estimates that across the greater Los Angeles area, over 540,000 homes are at risk of flash flooding damage. These properties have a combined rebuild value of more than $258 billion USD. In early February, the US West Coast experienced atmospheric river-related flooding similar to what occurred in the winter and spring of 2023, which has left hundreds of thousands of homes in California at considerable risk of flooding.

Reask and Fathom create tropical cyclone rainfall model

Initially partnering in 2022, modelling firms Reask and Fathom have created a new tropical cyclone rainfall model. It generates rainfall footprints for every current and historic event. The model and data can be used to add a rainfall-related trigger to parametric wind insurance policies.

Quotech launches exposure management tool

Founded in 2020, Quotech provides technology for commercial underwriters and brokers. The company has worked closely with its clients to create Quex, a new exposure management tool. It allows for portfolio-wide impacts of catastrophe events to be monitored in real time. The tool is currently focused on property, but Quotech is looking to expand this to other lines of business.

Ageas partners with WeatherNet for extreme weather forecasts

WeatherNet’s tool, SurgeCast, predicts the geographical impact of extreme weather events. Ageas UK will use the application to identify impending severe weather and assist customers who are most susceptible to its effects. SurgeCast provides Ageas with customised weather forecasts for the postcodes of its policyholders, updated four times daily and extending up to 16 days ahead.

MIC to provide insurance for loss of income caused by floods in India

Insurer MIC Global has designed a parametric product covering micro businesses and gig workers in India, using technology from Weather Risk Management Solutions (WRMS). The product, which provides coverage against loss of income due to flooding in a worker’s local area, is being distributed by MIC’s platform partners and local insurers in India.

JBA partners with Old Mutual Insure for South Africa flood maps

South African non-life insurer Old Mutual Insure will use JBA Risk Management’s flood maps for underwriting both personal and commercial lines. The insurer will access JBA’s flood data using JBA’s online platform, Flyvis, which provides property-level flood risk data for any location.

EigenRisk webinar: What The Hail!

In partnership with weather data provider Canopy Weather, EigenRisk hosted a webinar about hail and tornado risk. The discussion covered the importance of understanding pre-existing conditions and what can be learned from the 2023 hail and severe convective storm season. The webinar can now be watched on-demand.